2012 (5) TMI 454 - AT - Central Excise

Non fulfillment of export obligation - demand imposed for the duty free import of the capital goods along with interest and for imposition of penalty - assessee registered for an 100% EOU, on failure to comply with export obligation, re-exported impugned capital goods imported - Held that - Since the goods imported after availing of the facility under EOU scheme, were subsequently exported after observing Customs and Central Excise procedure, no duty liability continue to exist on the assessee and they fulfilled all the conditions as laid down in Para 6.18(e) of Foreign Trade Policy 2004 2009 to exit from the EOU scheme, there is no question of further imposition of duty of Customs on such imported goods subsequently allowed to be re exported. Charge of non fulfillment of export obligation is not established - Decided in favor of assessee.

Summary

Issues:
1. Appeal against dropping of proceedings by the Commissioner.
2. Compliance with conditions to exit from the EOU scheme.
3. Permission for re-export of capital goods.
4. Discrepancy in customs appraisal of goods.
5. Fulfillment of export obligation.

Analysis:
1. The appeal was filed against the dropping of proceedings by the Commissioner after the respondent failed to comply with the export obligation. The Revenue contended that conditions to exit from the EOU scheme were not fulfilled by the respondent, leading to the initiation of proceedings demanding duty, interest, and penalty.

2. The respondent argued that due to delays in civil construction, infrastructure arrangements, and issues with their foreign collaborator, they were unable to set up the EOU. They obtained permission for re-export of capital goods from the Development Commissioner and jurisdictional Joint Commissioner, supported by a no dues certificate issued by the Assistant Commissioner.

3. The Assistant Development Commissioner and jurisdictional Joint Commissioner had permitted the re-export of goods, and the Commissioner found that the department failed to establish non-fulfillment of conditions to exit from the EOU scheme. The respondent had followed all necessary procedures for re-export, including compliance with Customs and Excise guidelines.

4. There was a discrepancy in the customs appraisal of goods, where a "Compute Monitor" was wrongly appraised as a "Ceramic Tea Cup set." However, the goods were re-exported in their original packed condition after proper appraisal by customs authorities and under central excise supervision, fulfilling all necessary procedures.

5. The Commissioner's findings were clear and well-supported by evidence, with the Department unable to produce any contrary evidence. As a result, the Tribunal upheld the Commissioner's order, dismissing the appeal for lack of merit. The respondent was found to have fulfilled all conditions to exit from the EOU scheme, and no further duty liability existed on the imported goods subsequently re-exported.

This detailed analysis of the judgment highlights the key issues involved, the arguments presented by both parties, and the Tribunal's decision based on the evidence and legal provisions.